Image differentiation with corporate ... - Wiley Online Library

Corporate Social Responsibility and Environmental Management Corp. Soc. Responsib. Environ. Mgmt. 17, 142–152 (2010) Published online 16 March 2010 in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/csr.225

Image Differentiation with Corporate Environmental Responsibility Pasi Heikkurinen* MTT Agrifood Research Finland and University of Vaasa, Finland

ABSTRACT This paper analyzes strategic implications of corporate responsibility (CR) and in particular how a firm can differentiate with an environmentally responsible image. A single case study was conducted in the Nordic hospitality industry with semi-structured interviews as the main data collection method. By adopting an environmentally responsible identity through shared values with the firm’s key stakeholders, the firm can reflect an environmentally responsible image. This image can enhance the firm’s strategic position through internal and external differentiators from competitors – as the firm becomes a more preferred employer, partner and supplier, it results in enhanced employee motivation, cost savings, better reputation, and greater guest loyalty. The amount of CR depends on the micro/meso/macro/global-level drivers, and competitive aims of the firm. The emphasis on stakeholder communication becomes greater as the firm increases its CR-aggressiveness. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment. Received 12 October 2009; revised 17 December 2009; accepted 18 December 2009 Keywords: image differentiation; corporate responsibility; environmental responsibility; strategic CR; hospitality industry; key stakeholder approach

Introduction

C

ORPORATE RESPONSIBILITY (CR) AND ENVIRONMENTAL MARKETING/MANAGEMENT (EM) ARE RECEIVING GREAT attention from academic scholars and practitioners. Increasingly different sectors are showing an interest in environmental concerns: firms are eco-labeling and expressing their passion for sustainable growth; governments are enacting laws concerning emissions and waste reductions; non-governmental organizations (NGOs) are demonstrating; media is spotlighting the issue; and families are recycling and have more information about the phenomenon than ever before. While the boundaries of these sectors are blurring, it is obvious that this green trend has changed and keeps changing the competitive environment, creating new business opportunities and threats. The firms concerned about their short-term profitability are more likely to resist the upcoming costs of greening and see the proliferated environmentalism rather as a threat to their business (Richter, 2001). The long-term oriented firms seem to understand the necessity of these investments and the new opportunies they hold. These ‘firms that see * Correspondence to: Pasi Heikkurinen, Project Researcher, MTT Agrifood Research Finland, Luutnantintie 13, FIN-00410 Helsinki, Finland. E-mail: pasi.heikkurinen@mtt.fi Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment

Image Differentiation with Corporate Environmental Responsibility

143

environmental issues as opportunities rather than threats are more likely to succeed by establishing a competitive advantage over their competition’ (Friedman and Friedman, 2009). The purpose of this research paper is to explore and analyze the strategic implications of CR. The study aims at increasing the understanding of the phenomena with a model-building approach that is based on the stakeholder theory (Freeman, 1984). The main problem is phrased as follows: how can a firm differentiate with corporate responsibility (CR) and in particular with an environmentally responsible image? Because of the non-existence of antecedent models, the emphasis of the study is on theoretical reasoning; however, an empical case study is conducted to support the working propositions and theoretical framework. The selected case is a hotel chain, Scandic, and the dissected context is the Swedish-Finnish hospitality industry.

Theoretical Framework This section presents the concepts, reviews the strategy approach and aims at developing five working propositions.

Corporate Responsibility The concept of CR, a part of the entity of corporate sustainability, consists of economic responsibility, environmental responsibility (van Marrewijk, 2003), and socio-cultural responsibility (Ketola, 2008). CR cannot and does not equal sustainability, because responsibility is relative and sustainability is absolute (Ketola, 2005; 2007). In this study, CR is considered as a voluntary task, meaning that companies do more than laws and regulations require (Carroll, 1979). CR impacts the organizational culture, which requires the development of new shared values, as well as strategic embedding within the organization of the three pillars: people, planet, and profit (Cramer, 2005). Strategic CR is one way to execute corporate responsibility. The aim is to create a win-win-win situation, in which CR enables the people, planet, and profit to prosper. Moreover, CR becomes strategic when it yields substantial, business-related benefits to the firm, in particular by supporting core business activities, thus contributing to the firm’s effectiveness in accomplishing its mission (Burke and Logsdon, 1996).

Differentiation Strategy Each industry has its own characteristics and reacts uniquely to external and internal changes. Also in the case of corporate responsibility (CR), not all industries behave in a similar manner because of non-equal exposure to CR challenges. Peng (2006) argues that industries with direct and vast to the environment such as mining and chemical are more likely to interact with CR issues. However, best practises are from industries such as food, IT, and cosmetics (Kotler and Lee, 2005). Nevertheless, it seems that all industries are becoming more vulnerable, and over time no industry will have immunity from CR concerns. The Configuration School of Strategy states that ‘each school has its own time, in its own place’ (Mintzberg et al., 1998). In the Positioning School (Porter 1980; 1985; 1996), or Porterism (Näsi, 1996), according to the capabilities of a firm and the conditions of an industry, one of the three or a combination of the three generic strategies is chosen for a competitive strategy that can enhance a strategic position that creates barriers for competition (Porter, 1985). Being aware of the generic strategy trap (Miller, 1992) and the pitfall of oversimplifying the analysis (Haberberg and Rieple, 2008), the differentiation strategy appears suitable for CR: in differentiation, a company seeks for ways to be unique (often beyond the physical product) that lead to a price premium (Porter, 1980; 1985); and due to environmental concerns, differentiation opportunities are growing (Winsemius and Guntram, 2002).

Reputation, Image and Identity Corporate reputation is an intangible way to differentiate services and products from competitors. Reputation is built upon ethics and morality; history; efficiency; the product; public image; and human resource management Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment

Corp. Soc. Responsib. Environ. Mgmt. 17, 142–152 (2010) DOI: 10.1002/csr

144

P. Heikkurinen

(Siltaoja, 2006b). Therefore, a favorable image is one of the factors that, over time, creates a favorable reputation. However, according to Pruzan (2001), the creation of an outer image alone may not lead to desired results. In order to have an improved and a more inclusive description of the organization and its performance, the new image should rather be a reflection of an internal identity (Pruzan, 2001). This leads to the first working proposition (WP) that suggests that [WP1] a reflected image is more likely to lead to desired results than a merely pragmatic image. Heikkurinen and Ketola (2009) suggest that in order to have a more coherent and stable image and reputation, firms should focus on being their identity rather than trying to manage it. Identity of an organization is formed by the cognitions, emotions, and aesthetic appreciations of its members (Hatch and Schultz, 2004), and functions as an umbrella term for corporate identity (Heikkurinen and Ketola, 2009). The distinction by Bendixen and Abratt (2007) between corporate identity (i.e., what the firm is) and corporate image (i.e., what the firm is perceived to be) seems to be accepted throughout business life and academia. Arguably, the internalizing of a CR identity is less complicated and requires less organizational learning if the organization has some experience of responsible behavior. And the more CR is an integral part of the culture, the easier it is to communicate the norms and values underlying the concept (Cramer, 2005). The value theory connects reputation and CR (Siltaoja, 2006b). Since reputation is a very context-related issue (Siltaoja, 2006a), like CR (Halme et al., 2009), a firm must be sure that the new image corresponds and is parallel with its stakeholders’ values and needs in a specific context. But because a firm cannot meet all the expectations of all their stakeholders, it must concentrate on its key stakeholders – the stakeholders that matter the most. Therefore it can be proposed that [WP2] a key stakeholder oriented firm forms and re-forms its values according to its key stakeholders’ values. In addition, since the amount of appreciation toward environmental responsibility depends greatly on the culture the key stakeholders identify with, it can be proposed that [WP3] a key stakeholder oriented firm adjusts the amount of its CR activities, according to the context of its key stakeholders at issue. A well created (i.e., reflected), positive, image strengthens a firm’s competitive position (Marconi, 1996). In a quantitative study, McWilliams and Siegel (2001) found positive impacts of CR on corporate reputation, and a lack of CR effectively ruining a corporate image. Even though marketing communications are vital in image building, a corporate image is not created in the marketing department. The whole value chain (Porter, 1985; Porter and Kramer, 2006) needs to be reconfigurated in order to meet the desired image. This is because the full dedication of the whole value chain decreases the possibility for unwanted errors; as Ketola (2006a; 2006b) stresses, the importance of consistency in values, words, and actions. Hence the next proposition is that [WP4] a responsible identity is built upon the whole value chain of the firm.

Drivers for Environmental Marketing Since only the received and experienced value of the stakeholder matters (Porter, 1985), marketing plays an important role in strategic CR. In EM, environmental expenditure is viewed as an investment in the firm’s ability to create value for its owners, buyers, and other stakeholders (Miles and Covin, 2000). A multiple case study of 17 Finnish small and medium enterprises (SMEs) shows that the personal interests of entrepreneurs and owners were the main motive for environmental responsibility consideration (Mäntylä et al., 2001). According to Mäntylä et al. (2001), the other motives were the requirements of external stakeholders’ (mostly customers) intentions to keep up with competition and ahead of the legislation. These CR actions are mostly done in the hope of cost savings and image benefits (Mäntylä et al., 2001). Since some of the value to stakeholders can be created through corporate image, EM tends to enhance differentiation-based competitive advantage, besides conceivable cost savings. The produced competitive advantage through differentiation-based positioning targets environmentally sensitive stakeholders, and therefore also relates to the focusing strategy. However, the form of advantage may not be receivable if the corporate strategies are contradicting the environmental strategies. Therefore, Ketola (2007) suggests that the desired results will most likely be achievable if (and when) the environmental strategy is the corporate strategy. Since not all stakeholders value environmental actions in equal terms, it is important to focus on where the demand exists. Arguably, a demand for strategic CR and environmentalism must either exist or is to be created – otherwise, there will be no financial gains in sight. However, often the demand is not seen as something static; Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment



145

rather it is seen as something that can be anticipated and affected. Thus it can be proposed that [WP5] if a demand for corporate responsibility does not exist, firms can create it by supplying corporate responsibility. In Aragón-Correa and Sharma (2003), proactive (refers to anticipated demand) corporate environmental strategies were actually found to be associated with improved financial performance (Klassen and McLaughlin, 1996; Judge and Douglas, 1998). In order for ‘environmental image differentiation’ to be successful, stakeholders and potential buyers must be fully aware of environmental actions and values; otherwise they might as well do business with a firm without such attributes (McWilliams and Siegel, 2001). Therefore, marketing communication holds an intrinsic part in raising awareness among stakeholders, and companies shall focus on communicating the CR issues with the greatest shared value among key stakeholders. However, the intensity of actions should be more on the primary activities and less on the supportive activities of the value chain (Porter and Kramer, 2006).

Research Methodology Since the research method and data are subordinates to the research problem (Uusitalo, 1991), the research problem and questions defined the qualitative method and data used. The case study method was chosen because the phenomenon is researched in its natural environment with different data; it does not require control over behavioral events, and it allows coverage of contextual conditions (Yin, 2003).

The Selected Case The selected case is the Nordic countries’ leading hotel chain, Scandic. The case company was chosen because of a gap in research regarding the context and the company’s rather extensive environmental agenda that is critical to the research problem addressed.

Data Reduction The term ‘data reduction’ refers to selecting, focusing, simplifying, abstracting, and transforming the collected data, and it starts before the actual collection of the data (Miles and Huberman, 1984). The empirical data was collected from both primary and secondary sources. The primary data consisted of unstructured and semi-structured in-depth interviews in the Nordic hospitality industry. Three key informants from the case company were interviewed: two from Sweden and one from Finland. Characteristic of this data collecting method is its flexibility and capability that allows new questions to be brought up during interviews. These theme interviews were conducted on a one-to-one basis and took from 70 up to 140 minutes each. The purpose was also to uncover underlying practices and attitudes behind the case company’s CR. The first key informant was a CEO of Scandic, the second key informant was Scandic’s former Vice President of Sustainable Business, and the third key informant was the case company’s Sustainability Controller. The secondary data collection consisted of selecting the most essential documents and archival records about the case company and the Nordic hospitality industry. The purpose of the secondary data was to prime and support the collection of the primary data, and prevent the collection of the same primary data twice.

Evaluation of the Study Since reliability and validity are rooted in positivism, they should be redefined to fit qualitative methods (Golafshani, 2003). Guba and Lincoln substituted reliability and validity with a similar concept of ‘trustworthiness’, consisting of credibility, transferability, dependability, and confirmability (Guba, 1981; Guba and Lincoln, 1982). Dependability – Since opinions of management, strategies and other codes of conducts change over time, the results are not repeatable. However, the interviewees were rather unanimous. The data triangulation also increases Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment


146

P. Heikkurinen

the dependability, as the company documents were compared with the interviews. Critical documents from impartial sources and a higher number of interviewees would have enhanced the dependability of the study. Transferability – The purpose of the generic theoretical framework was to increase the transferability of the study since the theory was not context-specific. However, the empirical results are transferable only to similar competitive environments. Creditability/confirmability – The study was conducted with transparancy. The interviews were recorded, listened to twice and transcriptions were written. The researcher conducted all of the interviews in person. A common problem of case studies is the generalization of the results as they only aim to make theoretical or analytical generalizations (Yin, 1989). However, what is lost in the generalization can be won in the depth and richness of the content (Uusitalo, 1991). And the results of the research should be evaluated based on the pragmatic usefulness of the results – hence it becomes a question of the relevance, simplicity, and handiness of the results (Niiniluoto, 1980).

Empirical Findings The First Working Proposition [WP1] A reflected image is more likely to lead to desired results than a merely pragmatic image. Often the discussions around corporate image/identity take place in the executive management and are facilitated by an external agency. It was found that in the case company the CR image building was led by the identity (what the firm is). The idea for CR came from a manager inside the company, and was thereby internalized into corporate values. These values led to responsible actions that were then communicated (reflected) to all stakeholders. When a responsible identity is built upon the responsible values of the firm, it seems to reflect as a responsible image. A time delay of approximately three to four years was found between the first CR actions in 1993 and the stakeholder perception and reaction. ‘It takes time when the image adapts’, a key informant of Scandic stated. The person continued: ‘Identity must result as an image. If an image does not correspond with what the firm is, then it is green-wash.’ At Scandic, the reflected image is seen as the only proper way to achieve long-term success. Hence the first working proposition receives strong support from the case company and is supported (Table 1).

The Second Working Proposition [WP2] A key stakeholder oriented firm forms and re-forms its values according to its key stakeholders’ values. The case company built its image through shared values with its the key stakeholders – the team members and the guests of the hotels – which indicates (key) stakeholder orientation. It was found that to some extent the case company re-forms and modifies its values according to its external key stakeholders’ (guests) values, and to a great extent according to its internal key stakeholder’s (team members) values. These findings support the latter part of the second working proposition (re-forms its values). At first, the environmentally responsible values rose from the team members, especially from the top management. Therefore, it can be stated that the case company formed its values according to its key stakeholders’ values (as the team members are a key stakeholder group and as the top management is part of the team members at Scandic). This reasoning supports the first part of the second working proposition (forms its values). However, the case company did not form its values in accordance with the external key stakeholder’s values. Therefore, an informative revision is made: the case company as a key stakeholder oriented firm, formed its values according to its internal key stakeholders’ values – and re-forms its values according to its internal and external key stakeholders’ values. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment



147

It can be deducted that an internal key stakeholder oriented firm forms its values according to its internal key stakeholders’ values, whereas an external-key-stakeholder oriented firm forms its values according to its external key stakeholders’ values. But even though the case company did not form its values based on both internal and external key stakeholders’ values, it did form its values in accordance with its key stakeholders’ values. Thus also the unrevised proposition can be verified (Table 1).

The Third Working Proposition [WP3] A key stakeholder oriented firm adjusts the amount of its CR activities according to the context of its key stakeholders. The values of the key stakeholders vary between the different countries in which Scandic operates. It was found that this difference in values (demand) seems to affect the supply of CR. Ideally, the demand should not affect the supply of CR, a key informant from the company states. The interviewee explains that being part of the solution (supplying CR) everywhere is a prerequisite for all businesses. This refers to the law of nature that ‘enacts’ that (over time) all firms must become responsible. In Finland and Sweden, slight differences were found in the firm’s key stakeholders’ values. However, if the values are dissected with a relative perspective (all countries in the world), the differences are minor. With an absolute perspective, the differences are more visible, as they affect the demand/supply for CR. In comparing CR actions (supply) between Sweden and Finland, the case company showed higher CR standards in Sweden than in Finland. In 2007, the CO2 emissions in Sweden were 1174 Kg/gn, when in Finland they were as high as 6375 Kg/gn (Scandic, 2009). Both figures are in kilograms per guest night, and are therefore comparable. It seems that Scandic has focused on minimizing CO2 emission especially in Sweden. ‘The closer you come to the head office, the more company like it becomes,’ said an interviewee. The consumption of water and energy were also clearly lower in Sweden, as well as the amount of unsorted waste. On the other hand, in the areas of water consumption and recycling, Scandic Finland has improved faster than Sweden. This could be due to the fact that auditing for CR actions began five years later in Finland than it did in Sweden (Scandic, 2009). In addition, in the beginning of CR supply, the cut down of emissions is easier. In Finland, the case company supplies less CR than in Sweden because of (1) the lower demand (difference in stakeholder values); and (2) partly due to technical issues (disagreements with real estate owners over changing hotels to be more ‘green’). Since some countries have stricter laws and regulations than others, the level of compliance is also diverse. Therefore, the amount of CR – to meet the definition of strategic CR (over compliance) – is consequently diverse. Hence the more developed environmental laws of society in Sweden can partly explain the higher CR supply/actions in Sweden. The right amount of CR is when it becomes profitable today or maybe tomorrow, because, according to one interviewee ‘if you focus on the things that will become profitable 2025, you will eventually die because you will not be profitable’. This factor can be referred as the law of market – firms must be profitable and competitive. These findings support the proposition, i.e., that the context of the key stakeholders has an influence on the amount of CR activities through the key stakeholder values (Table 1). In addition, three multilevel drivers besides stakeholder demand were detected: the law of nature on a global level, the law of society on a macro level, and the law of market on the meso level. The key stakeholder values functioned as a driver for CR supply on the micro level.

The Fourth Working Proposition [WP4] A responsible identity is built upon the whole value chain of the firm. The role of CR is substantial in the case company’s identity. The identity is seen to be parallel with the key stakeholders’ identity. However, guests (external key stakeholders) have little effect on the corporate identity because Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment


148

P. Heikkurinen

they come in some many roles. The team members (key internal stakeholder), especially the management, are the ones that are the identity of a company, and hence create the corporate values. ‘Values are something that should be reflected throughout the business’, a key informant stresses. Therefore identity is not something that changes over a week, or two, or not even a year. It was found that it is crucial that the whole value chain agrees with the values of the case company. At Scandic, image building and identity are seen as internal dialogue processes, in which absolutely everybody in the value chain takes part. The reasons for this are: (1) it is much more motivating for team members if they can participate and contribute to the identity building; and (2) guests meet with team members and they have to have a lingua franca, a common understanding. ‘Otherwise an image from an agency says that this is the most sustainable company in the world, and then the team members saying that well we haven’t heard that.’ These findings support the fourth working proposition. As well as any identity, a responsible identity is built upon the whole value chain of a firm. The key internal stakeholders create/are the identity of a firm since the reflection is based on the corporate values of the whole value chain (Table 1).

The Fifth Working Proposition [WP5] If a demand for corporate responsibility does not exist, firms can create it by supplying corporate responsibility. This fifth proposition seems to have some value as the case company started to supply CR without actual demand existing for it. Within a timeframe of three years or more, the demand became more active. On the other hand, there is no specific evidence that the supply of CR by the case company created the demand. Therefore this working proposition cannot be validated. However, under similar industry conditions (first mover situation) and the macro conditions (rising awareness in environmental issues) that the case company had, the proposition could be partly supported. It was found that if the demand responds to the supply of CR, there is a time delay between action and perception of three to four years. Hence it could be deduced that if a demand for corporate responsibility does not exist, firms can hasten its emergence by supplying corporate responsibility (Table 1).

[P1] A reflected image is more likely to lead to desired results than a merely pragmatic image. [P2] A key stakeholder oriented firm forms and re-forms its values according to its key stakeholders’ values. [P3] A key stakeholder oriented firm adjusts the amount of its CR activities according to the context of its key stakeholders. [P4] A responsible identity is built upon the whole value chain of the firm. [P5] If a demand for corporate responsibility does not exist, firms can hasten its emergence by supplying corporate responsibility. Table 1. Revised and supported propositions

Discussion The purpose of this research was to explore and analyze the possible strategic implications of CR with a modelbuilding approach. The findings suggest that to a large extent CR can be a strategic issue. However, a strategically successful position requires attributes other than merely a responsible image. CR can increase both cost efficiency by saving natural resources and increase differentiation by adding value to a firm through favorable image creation. Accordingly, it seems that a firm can enhance its competitive position with CR. However, the model is not committed to that argument even though the question is related to the research problem. Instead, the following model (Figure 1) describes how a firm can differentiate itself with CR and, in particular, with environmental responsibility. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment



149

Environmentally Responsible Image Differentiation It was found that treating stakeholders as one group (in case of strategic CR) is an unacceptable, loose and inaccurate viewpoint. A firm has a myriad of stakeholders with different expectations and various interests that are often (also) contradictive; a firm is incapable of catering to all of its stakeholders. Therefore this study used a modified approach to stakeholder theory (Freeman, 1984) that can be referred as the key stakeholder approach. In the model (Figure 1), the key stakeholders are identified and divided into internal and external parties. In this specific case study, CR was internally driven (starting from internal stakeholders) by the team members. CR can also be driven by external stakeholders, i.e., externally driven CR. In this case study, the external key stakeholders were not driving CR – yet they did become active after the case company started to supply CR. This study proposes that [P5] if a demand for corporate responsibility does not exist, firms can hasten its emergence by supplying corporate responsibility. In addition to internal and external key stakeholders, there exist key stakeholders that belong to both and/or neither parties, e.g., shareholders. The interest and the amount of initiative are distinctive factors between stakeholders and key stakeholders. In the case company, the shareholders lacked interest in CR. According to the revised model, a firm can differentiate itself with an environmentally responsible image. This image is a perception of the key stakeholders (both in internal and external) and results in internal and external differentiators that can enhance the firm’s strategic position. The internal differentiators and benefits of an environmental image are a more preferred employer; enchanced employee motivation; and cost savings. The external differentiators or benefits of an environmentally responsible image are a better reputation; a more preferred partner and supplier; and greater guest loyalty. The image perception is built through communication (supply) that should be based on actual CR actions since [P1] a reflected image is more likely to lead to desired results than a merely pragmatic image. The amount of CR actions vary in different countries of operation since [P3] a key stakeholder oriented firm adjusts the amount of its CR activities according to the context of its key stakeholders. The CR actions that a firm renders are reflected by the firm’s responsible identity – however, the identity may not be affected every time there is a change in corporate values, or at least there will be a time delay. The responsible identity is a result of internalized CR values

Figure 1. Key stakeholder approach to image differentiation Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment


150

P. Heikkurinen

throughout the whole value chain of a firm since [P4] a responsible identity is built upon the whole value chain of the firm. These transfigured values are originated from the key stakeholders’ values since [P2] a key stakeholder oriented firm forms and re-forms its values according to its key stakeholders’ values. A firm is driven on four different levels (Figure 2) that direct the firm’s aggressiveness toward CR. On the micro level, which the revised model illustrates (Figure 1), firms operate under the expectations of individuals and stakeholders. On the industry level, or meso level, firms are pushed toward CR by their partners and competitors. On the macro level, firms are required to supply CR de jure, i.e., in accordance with society’s laws and regulations. And lastly on the highest level, the global level, firms are pushed toward CR by the fact that the present ecosystem is fragile and necessitates increased attention to protecting it. Even though this study focused on the differentiation strategy instead of the cost leadership strategy, it can be concluded that the image differentiation with CR is inclusive of cost efficiency. These generic strategies should not be seen as entirely separate or different options, especially in the case of the environmentally responsible image. As Hollensen (2007) concluded: ‘Firms have a competitive advantege in a market if they offer products . . . with higher perceived value to the customers and lower relative costs than competing firms.’ Thus CR can be a matter of both increasing the value and lowering the costs.

Managerial Implications CR management is about guaranteeing that a firm actually survives in the long run. In order to maintain shortterm profitability, firms should start with small steps toward CR but change their whole way of thinking (values) and apply it throughout their value chain. Companies that see CR as something that the marketing department could take care of would probably do better by not doing anything at all and putting the money toward something else. When a company becomes environmentally responsible, it can often rip easy cost benefits by merely utilizing its resources efficiently, whereas image differentiation requires more time, commitment, and additional resources. Deciding the amount of CR (actions) depends on the competitive aims. Ansoff and McDonnell (1990) identified five levels of strategic aggressiveness: stable, reactive, anticipatory, entrepreneurial, creative – and Ketola (1992; 2005; 2008) has applied these to environmental and CR strategies. The levels seem applicaple for the CR aggressiveness of a firm. Passive, reactive and proactive CR are dependent on the competitive environment, whereas entrepreneurial and creative CR are less dependent, respectively. This study identified competitive aims for each level (Figure 3). As managerial implications, leaders/managers need to decide what their competitive aims are regarding their CR and act accordingly. As firms increase their CR aggressiveness, greater emphasis should be placed on stakeholder communication (words). Hereby the Holy Trinity of CR (values-actions-words) converge (Ketola, 2006b).

Figure 2. Micro/meso/macro/global-level drivers for CR Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment



151

Figure 3. Five levels of CR aggressiveness and competitive aims (adapted from Ansoff and McDonnell, 1990; Ketola, 1992; 2005)

Future Research Opportunities As a single case study, the results and conclusions cannot be generalized – therefore multiple case studies and quantitative testing are highly recommended. This study focused on just one firm. Further studies should be conducted from a supply-chain perspective.

References Ansoff HI, McDonnell E. 1990. Implanting strategic management. Prentice-Hall: London. Aragón-Correa A, Sharma S. 2003. A contingent natural-resource based view of proactive environmental strategy. Academy of Management Review 28: 71–88. Bendixen M, Abratt R. 2007. Corporate identity, ethics and reputation in supplier–buyer relationships. Journal of Business Ethics 76: 69–82. Burke L, Logsdon JM. 1996. How corporate social responsibility pays off. Long Range Planning 29: 495–502. Carroll AB. 1979. A three-dimensional conceptual model of corporate performance. The Academy of Management Review 4: 497–505. Cramer J. 2005. Company Learning about corporate social responsibility. Business Strategy and the Environment 14: 255–266. Freeman RE. 1984. Strategic management: A stakeholder approach. Boston: Pitman. Friedman HH, Friedman LW. 2009. How virtuous is your company? A checklist. Electronic Journal of Business Ethics and Organizational Studies 14: 14–20. Golafshani N. 2003. Understanding reliability and validity in qualitative research. The Qualitative Report 8: 597–607. Guba EG. 1981. Criteria for assessing the trustworthiness of naturalistic inquiries. Educational Communication and Technology Journal 29: 75–91. Guba EG, Lincoln YS. 1982. Epistemological and methodological bases of naturalistic inquiry. Educational Communication and Technology Journal 30: 233–252. Haberberg A, Rieple A. 2008. Strategic management: Theory and application. Oxford University Press: Oxford Halme M, Roome N, Dobers P. 2009. Corporate responsibility: Reflections on context and consequences. Scandinavian Journal of Management 25: 1–9. Hatch MJ, Schultz M. (Eds). 2004. Organizational Identity: A Reader. Oxford University Press: Oxford. Heikkurinen P, Ketola T. 2009. A responsible identity: Reflections to image and reputation through awareness approach. Proceedings at CCI Conference on Corporate Communications, Wroxton, UK, 5–8 June 2009. Hollensen S. 2007. Global marketing: A decision-oriented approach. Prentice Hall: London. Judge WQ, Douglas TJ. 1998. Performance implications of incorporating natural environmental issues into the strategic planning process: An empirical assessment. Journal of Management Studies 35: 241–262. Ketola T. 1992. Environmental management and leadership – Neste as an example. Hallinnon tutkimus 2, Tutkimusselosteita. Ketola T. 2005. Vastuullinen liiketoiminta. Edita: Helsinki. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment


152

P. Heikkurinen

Ketola T. 2006a. Uskonto ja filosofia vastuullisen liiketoiminnan voimavaroina. In: Ketola T (ed). What corporate responsibility research can give to business know-how: Values, strategies and practices. Turku School of Economics, Series KR–1:2006: Turku; 47–64. Ketola T. 2006b. Do you trust your boss? – A Jungian analysis of leadership reliability in CSR. Electronic Journal of Business Ethics and Organization Studies 11: 6–14. Ketola T. 2007. How to turn corporate responsibility strategies into business strategies? European Academy of Management Conference. Ecole Centrale, HEC-Paris and INSEAD, Paris, 16–19 May 2007. Ketola T. 2008. From psychopaths to tesponsible vorporations – Waking up the inner sleeping beauty of companies. Nova Science Publications: New York. Klassen RD, McLaughlin CP. 1996. The impact of environmental management on firm performance. Management Science 42: 1199–1214. Kotler P, Lee N. 2005. Corporate social responsibility. Doing the most good for your company and your cause. John Wiley & Sons: New Jersey. Mäntylä M, Syrjä T, Vainio A, Vehkala M, Wuori O. 2001. Pk-yritysten kilpailukyky. University of Vaasa, Levón Institute Publication Series 86: Vaasa. Marconi J. 1996. Image marketing. Using public perceptions to attain business objectives. NTC Business Books: Illinois. McWilliams A, Siegel D. 2001. Corporate social responsibility: A theory of the firm perspective. Academy of Management Review 26: 117–127. Miles MB, Huberman AM. 1984. Qualitative data analysis: A sourcebook of new methods. Sage Publications: Newbury Park. Miles MP, Covin JG. 2000. Environmental marketing: A source of reputational, competitive, and financial advantage. Journal of Business Ethics 23: 299–311. Miller D. 1992. The generic strategy trap. Journal of Business Strategy 13: 37–41. Mintzberg H, Ahlstrand B, Lampel J. 1998. Strategy safari – The complete guide through the wilds of strategic management. Pearson Education Limited: Edinburgh Gate. Niiniluoto I. 1980. Johdatus tieteenfilosofiaan. Otava: Keuruu. Näsi J. 1996. Arenas of strategic thinking. Foundation for Economic Education: Helsinki. Peng MW. 2006. Global strategy. Thomson South-Western: Taunton. Porter ME, Kramer MR. 2006. The link between competitive advantage and corporate social responsibility. Harvard Business Review 12: 78–92. Porter ME. 1980. Competitive strategy – Techiques for analyzing industries and competitiors. The Free Press A Division of Macmillan: New York. Porter ME. 1985. Competitive advantage – Creating and sustaining superior performance. The Free Press A Division of Macmillan: New York. Porter ME. 1996. What is Strategy? Harvard Business Review 74: 61–78. Pruzan P. 2001. Corporate reputation: Image and identity. Corporate Reputation Review 4: 50–64. Richter AHM. 2001. From compliance to competitive advantage: The effect of corporate culture and profitability on environmental performance. Doctoral disseratation at University of California: Berkeley. Scandic. 2009. www.scandic.com [15 February 2009]. Siltaoja ME. 2006a. The relationship between corporate social responsibility and corporate reputation from a value-laden viewpoint: An empirical study in a Finnish newspaper context. Licentiate thesis at University of Jyväskylä: Jyväskylä. Siltaoja ME. 2006b. Value priorities as combining core factors between CSR and reputation. Journal of Business Ethics 68: 91–111. Uusitalo H. 1991. Tiede, tutkimus ja tutkielma: Johdatus tutkielman maailmaan. WSOY: Juva. van Marrewijk M. 2003. Concepts and definitions of CSR and corporate sustainability: between agency and communication. Journal of Business Ethics 44: 95–105. Winsemius P, Guntram U. 2002. A thousand shades of green. Sustainable strategies for competitive advantage. Earthscan Publications: London. Yin RK. 1989. Case study research: Design and methods. Sage Publications: Thousand Oaks. Yin RK. 2003. Case study research: Design and methods. Sage Publications: Thousand Oaks.

Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment
